[143] In reaching their conclusions, the Panel was entitled to
take into account the large position taken, in Masonite, in these
accounts. However, before drawing a negative inference from the
fact that a large position was taken in Masonite, the Panel was
obliged to consider the history of the accounts. The Panel was
also obliged to consider the relative dollar value of those positions. That was a necessary step in evaluating the reasonableness of drawing the inference that the purchases were the result
of inside information. The Panel did that when they considered
the purchases made by Azeff and Bobrow of Masonite, Dynatec
and Legacy. They also did it when they considered Miller’s purchases of Masonite. However, the Panel did not do that analysis
in the case of Cheng.

[144] In the end result, the Panel’s reasons state the followingevidence incorrectly:( i) that Miller was Cheng’s mentor/supervisor when in factthere was no such close relationship at the material times;

( ii) that Cheng bought stock for himself when he did not.

[145] In addition, unlike the approach taken by the Panel
when they reached their conclusions regarding the other appellants, the Panel appears not to have taken into account the following evidence with respect to Cheng:
( i) that Miller told Cheng the information was a “rumour”;

( ii) Cheng said he would have made inquiries of others about
the stock;

( iii) the dollar value of the purchases made by Cheng was small;

( iv) the history of trading in the Cheng family accounts.

[146] The cumulative effect of these errors renders the Panel’s conclusion regarding Cheng both an unsafe, and an unreasonable, one. It cannot be said, with any degree of confidence,
that the decision is “justif[ied], transp[arent] and intelligib[le]”.5
Consequently, the finding that Cheng ought reasonably to
have known the information he received, and passed on, originated from an insider must be set aside, as must be the sanctions imposed.